UPDATE 6-Keystone XL pipeline bill dies in U.S. Senate

WASHINGTON, Nov 18 (Reuters) - A bill to force approval of the Keystone XL pipeline failed in the U.S. Senate on Tuesday, sparing President Barack Obama from an expected veto of legislation that several fellow Democrats supported.

The measure fell just short of the 60 votes needed for passage, despite frantic last-minute lobbying by supporters, especially Democratic Senator Mary Landrieu of Louisiana, who faces a runoff election on Dec. 6. She has staked her hopes of winning a fourth Senate term on the Keystone gambit.

The tally was 59 to 41 on TransCanada Corp’s $8 billion project, with all 45 Republicans supporting the bill.

Republican Senator Mitch McConnell, who will become Senate Majority Leader in January after his party made big gains in this month’s midterm elections, said after the vote that consideration of a Keystone bill would be “very early up” in the next congress.

Obama opposed the Keystone bill and wants the State Department to finish its review of the pipeline. He has said he would not approve the pipeline if it significantly raised greenhouse gas emissions.

If the bill had passed, Obama was widely expected to veto it, a power he has used only three times during his six years in office. Obama raised new questions about the project during a trip to Asia late last week, saying it would not lower gas prices for U.S. drivers but would allow Canada to “pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else.”

Republican Senator John Hoeven of North Dakota, who co-sponsored the Keystone bill with Landrieu, has pledged to keep trying to force approval of the project that the administration has kept under review for more than six years.

Hoeven may introduce a new bill in January or February, or he could attach a Keystone measure to a broader bill that Obama would find difficult to veto.

The Senate will have 63 “yes” votes for Keystone next year and is “starting to coast” to the 67 that would be needed to overturn an Obama veto, Hoeven predicted. “Getting to that magic number is a possibility,” he said.

Despite the loss, Landrieu was upbeat. “There’s no blame, there’s only joy in the fight,” she told reporters.

UNLOCK ITS BENEFITS

Construction workers, unions and energy companies say the pipeline, which would transport more than 800,000 barrels of oil a day from Alberta to Nebraska en route to the Gulf of Mexico, would create thousands of jobs.

But the project has galvanized environmentalists who say developing Canada’s oil sands would spike carbon emissions linked to climate change and that much of the oil would be sold abroad.

Tom Steyer, the billionaire ex hedge-fund manager who raised millions of dollars to support environmentally-minded candidates in the midterm elections, said the Senate “decided to stand on the right side of history.”

The State Department has delayed a final decision on Keystone pending a legal decision in Nebraska over the pipeline’s route that is expected in coming weeks. The department has said in previous reviews that Keystone would not significantly boost greenhouse gas emissions.

Tuesday vote was taken hard in Canada where development of the oil sands is important to Alberta’s budget. “We are disappointed that U.S. politics continue to delay a decision on Keystone XL,” a spokesman for Canada’s Natural Resources Minister said via email.

Russ Girling, the chief executive of TransCanada, said his company will not give up: “We will continue to push for reason over gridlock, common sense over symbolism and solid science over rhetoric to approve Keystone XL and unlock its benefits.”

TransCanada, which has already built a pipeline from the Gulf Coast that would connect with Keystone XL in Nebraska, says the new link would take two years to complete once approved. As oil prices have fallen more than 25 percent since the summer, the pipeline could be an increasingly important piece of the puzzle for development of the oil sands.